How the UK Will Continue to Play a Leading Role in the Payments Industry

  • Kriya Patel, CEO at Transact Payments

  • 25.11.2021 01:30 pm
  • #Payments #Transact

Despite industry concerns over the UK’s direction after Brexit (not to mention post-pandemic), there are compelling reasons to believe the country will continue to play a vital role within the payments ecosystem. 

There are a number of clear reasons for this. Firstly, the UK has a growing population of 67 million that is served by over 350 banks and building societies and over 60,000 ATMs. Furthermore, the British public has ditched their bulky wallets filled with notes and coins for cards, with 174 million cards used for more than 21 billion transactions and a total card turnover of £783.1 billion at more than three million point of sale (POS) terminals and online. 

It is also home to an extremely digital-savvy population. This is best highlighted by the adoption of e-commerce, with online retail sales jumping by over 36% in 2020, amounting to £243 billion. With such a level of spending, the UK has one of the most advanced e-commerce markets in Europe.

Meanwhile, from an industry perspective, London will continue to be an essential hub for fintech and payments innovation, not just within Europe but also globally. While the market is already home to some of the biggest fintechs in the world, such as Revolut and Wise, UK fintechs also generated more investment capital in 2020 than the next five European markets combined, securing over £3 billion in funding. This serves to highlight how highly regarded the market is and also the talent and flair for innovation it boasts.

Yet, much like how the industry in Britain has evolved at breakneck speed in just a few years, significant changes are ahead. According to the Payment Systems Regulator (PSR), the country may try to pursue a strategy of “smart divergence” from the EU’s legislation. In effect, this could give the UK the ability and flexibility to adhere to EU rules and regulations that best serve the country, but also to diverge where commercial considerations differ. The biggest impact this could have is on British fintechs and present opportunities outside of Europe to forge partnerships in North America, Asia and beyond. Two markets that might be ripe for this include Canada and Australia due to similar legal systems and market dynamics. 

The country is also undergoing a number of in-market changes too. While the pandemic has accelerated the use of contactless cards, there’s also been wider adoption of newer innovations like digital wallets (linked to cards). The most recent evidence suggests they account for less than a third of all electronic transactions (2020) however, we’re likely to see increased usage in the coming years. Other trends evident in the British market include the development of soft POS and mobile POS systems, aimed at enabling wider acceptance for electronic payments.


Overall, the outlook for the UK payments industry appears filled with both current and future opportunities for growth, making the market one of the most exciting places to be. 

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